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Governor Parson Announces New Approach to Economic and Workforce Development

January 17, 2019

Jefferson City

Governor Mike Parson issued multiple executive orders today announcing a major restructuring of four state agencies in an effort to improve economic and workforce development in Missouri

“When you look at our economy, you see a lot of good things—low unemployment, job growth, wage growth,” Governor Mike Parson said. “But when you look at what’s happening in our neighboring states, you see that we could be doing a lot better. We believe these changes will move Missouri forward. This is how we become the best in the Midwest.”

“Missouri’s growth depends on our workforce,” Speaker of the House Elijah Haahr said. “Other states aren’t waiting for us to catch up. They’re moving forward, and the states that figure these problems out are going to win more jobs and more business for their citizens.”

“Now is the time to take a hard look at economic and workforce development,” President Pro Tem of the Senate Dave Schatz said. “We have businesses across our state who are looking to us for solutions on these critical needs. We need to deliver.”

The changes come after months of research, the results of which were shared during the Governor’s Conference on Economic Development last fall. The research showed that Missouri lags behind its peers in nearly every economic development measure.

“We looked at everything from the number of jobs that we help create to our workforce training program results, to macro-level measures like GDP growth and labor productivity,” Department of Economic Development Director Rob Dixon said. “What we found was that our numbers are trending positive, but we’re not seeing anywhere near the growth that our competitor states are.”

The research also delved into the complexity of Missouri’s economic development agency. It found that the Missouri Department of Economic Development has more employees and houses more functions than any of its peer agencies. When comparing the percentage of business development staff between agencies, the research found that Missouri dedicates only 4 percent of its staff to directly engaging with businesses. The average for Missouri’s competitors is 31 percent. By and large, these states tended to outperform Missouri in terms of job creation and capital investment.

The research conducted, combined with feedback gathered from nearly 4,000 Missourians across the state, helped shape the final changes issued in today’s executive orders.

“Talent is the most critical economic development incentive in our war chest. Governor Parson gets it. We are excited about this new direction and the Administration has done a fantastic job engaging Missourians throughout this process,” Dan Mehan, President and CEO of the Missouri Chamber of Commerce and Industry said. “They’ve acknowledged some difficult truths. They put aside bureaucratic turf, and they’ve built an economic development plan that’s right for Missouri.”

“Governor Parson's bold agenda for 2019 is right in line with the Regional Chamber's priorities: bring innovative economic development and workforce solutions that support Missouri businesses and grow jobs,” Tom Chulick, President and CEO of the St. Louis Regional Chamber said. “We fully support his efforts, and look forward to working together in 2019.”

“We appreciate the bold action taken by Governor Parson and his administration,” Joe Reardon, President and CEO of the Greater Kansas City Chamber of Commerce said. “His emphasis on workforce and infrastructure is right in line with the needs that we see in our community.”

Expanding and Improving Economic Development Resources

“All of the research and the feedback gathered pointed toward a few key principles,” Rob Dixon, Director of Economic Development said. "Our organization wasn’t built around our customers; we have a one size fits none approach to the different regions of our state; and all of this has resulted in an organization that lacks focus and doesn’t perform as well as we should.”

The solution announced today by the administration is a complete overhaul of Missouri’s economic development strategy. The executive orders issued call for a new Regional Engagement Division that will reassign existing staff to dedicate more resources to business development statewide. The teams that form this division will be located in the regions they serve and will be a primary point of contact for businesses and communities looking to interact with state government on economic development needs.

“This is truly a watershed moment for the department,” Dixon said. “We’re shifting our culture to be completely oriented around the customer and the communities we serve, and Missouri will have an economic development agency built for the 21st century.”

“You can’t underestimate the impact that this will have on communities across our state,” Jessica Craig, Executive Director of the Sedalia/Pettis County Economic Development Corporation said. "It brings an approach built around the unique needs of our communities, whether they are rural, suburban, or urban. That’s invaluable, and it makes all of us more competitive.”

Bringing State Resources to Bear on Workforce Development

The restructuring also included several measures to address the state’s growing workforce challenges, including moving the Division of Workforce Development under the Department of Higher Education.

“This change gives Missourians one resource for the full range of postsecondary options – from apprenticeships to certificates to doctoral programs,” Commissioner of Higher Education Zora Mulligan said. “It will position Missouri as a national leader in workforce development.”

In addition to the changes spelled out in the executive orders, Governor Parson announced several new workforce development initiatives in his State of the State Address that will be spearheaded by the restructured Department of Higher Education. The new initiatives include MoExcels, one-time funds for colleges and universities to expand high-demand programs, Fast Track, a financial aid program for adult learners and a new Office of Apprenticeships.

At near record-low unemployment, these changes come as businesses are struggling to find qualified workers.

“Workforce development is a critical issue in the St. Louis region. Our members consistently list finding workers at all levels as a key to their continued growth. It is a challenge that the St. Louis business community is coming together to address,” said Kathy Osborn, President and CEO of the St. Louis Regional Business Council. “We are encouraged to see state leaders addressing this critical need in a forward thinking manner.”

The executive orders also call for the creation of Missouri One Start, a new division of the Department of Economic Development dedicated solely to connecting businesses with skilled workers. During expansions and relocations, when businesses need to ramp up quickly and handle large numbers of job applicants, the new division will work with community and technical colleges to help market job openings, recruit, and train workers.

“Access to a strong workforce is one of the most important factors in business location decisions,” Matt Morrow, President of the Springfield Area Chamber of Commerce said. “Businesses have been telling us this for years, but now we have all of the right pieces in place to take action. This is exactly the kind of solution businesses have been clamoring for.”

Better Aligning Existing State Agencies

Also included in the orders are several shifts to better align certain policy areas with other state agencies. The Division of Energy will shift to the Department of Natural Resources. The Public Service Commission and Office of Public Counsel to the Department of Commerce and Insurance, formerly known as the Department of Insurance, Financial Institutions and Professional Registration, and the Missouri Arts Council will be housed under the Lt. Governor’s Office.

“The fact is that some of the functions currently within the Department of Economic Development are more closely related and better suited for other agencies,” Dixon said.

“We are pleased to welcome our colleagues in the Public Service Commission and the Office of Public Counsel to our department,” Chlora Lindley-Myers, Director, Missouri Department of Commerce and Insurance said. “While our names may be changing, our mission remains the same – to regulate the industry to ensure a safe and competitive market and to protect Missouri citizens.”

“We are excited to welcome the Division of Energy back to the Department of Natural Resources,” said Director Carol Comer. “We look forward to hitting the ground running by focusing our efforts on an affordable and reliable energy strategy for the State of Missouri.”

The changes made through executive order are also spelled out in the Governor’s FY 2020 budget and will take effect 60 days from the date the order was issued.